Under the relaxed arrangement, the government permitted the coffee growers to directly sell off their produce in India or overseas under what is described as a free sale quota. According to this system, growers will be permitted to sell 50% of their produce directly, while the remaining 50% would have to be marketed through the state-controlled Coffee Board, which is based in Bangalore in South India.
Prior to the liberalization and the introduction of the free sale quota, the growers were a frustrated and demoralized group who lacked incentive.
The Union Cabinet of India approved a proposal on January 13 to introduce free sale quota
(FSQ) for coffee in place of the internal sale quota (ISQ) through an ordinance, prior to effecting a suitable amendment to the Coffee Act.